Where can I find Land Contracts (contract for deed)?

13 Replies

Curious to know if anyone is successful in land contracts? If so, which market is hot for this and who would I talk about to acquire such a deal? Thanks.

Hi,

I feel "lease to own" contracts are ALOT easier...and quicker than land contracts....always use a ROCKSTAR local real estate att'y for your deals!

Matt

Although some markets may better support CFD, I wouldn't spend my time looking for it. CFD is a matter of circumstance, which may provide benefits for all parties involved over a cash or mortgaged purchase. This being said, they're hard to pinpoint, but definitely seek out distressed homes that would have a hard time on the traditional market, or homeowners with lots of equity.

Carrie

I see your in California, so if this is for California use forget it. The California courts ruled you need to foreclose if your going to quit a land contract, so you might as just well use Trust deeds and regular sales. I tore up all my land contract forms after the court ruling and just used lease options instead. Or a straight sale.

Originally posted by @Brian P. :

Carrie

I see your in California, so if this is for California use forget it. The California courts ruled you need to foreclose if your going to quit a land contract, so you might as just well use Trust deeds and regular sales. I tore up all my land contract forms after the court ruling and just used lease options instead. Or a straight sale.

 Thanks Brian. This is not for California. The markets I'm interested in are Alabama, Texas, Mississippi and the Carolinas. 

Carrie, Texas has such restrictive requirements for installment sales (CFDs) that they aren't done, other states are following the foreclosure requirements, new lending rules are also in place, issues of deeds being executed simultaneously are seen as cancelling out each other as deeds may be effective when executed rather than perfected by public notice.

These were popular for decades, no more, there are no advantages and still more  disadvantages, like insurance coverage, loss payee collections, authority of a buyer to conduct official business, like building permits. 

You need to shift gears to seller financing, Subject-To, Lease-Option type transactions.

Texas has restrictions as well with options, but the other methods mentioned are fine.

More issues apply to residential owner occupied (Dodd-Frank) but these issues also apply to commercial properties.

You can find more about CFDs by searching here on BP, to posts made in the past year.

Good luck :) 

Originally posted by @Bill Gulley :

Carrie, Texas has such restrictive requirements for installment sales (CFDs) that they aren't done, other states are following the foreclosure requirements, new lending rules are also in place, issues of deeds being executed simultaneously are seen as cancelling out each other as deeds may be effective when executed rather than perfected by public notice.

These were popular for decades, no more, there are no advantages and still more  disadvantages, like insurance coverage, loss payee collections, authority of a buyer to conduct official business, like building permits. 

You need to shift gears to seller financing, Subject-To, Lease-Option type transactions.

Texas has restrictions as well with options, but the other methods mentioned are fine.

More issues apply to residential owner occupied (Dodd-Frank) but these issues also apply to commercial properties.

You can find more about CFDs by searching here on BP, to posts made in the past year.

Good luck :) 

 Thanks for the advice Bill!

@Carrie Cathey  

Curious, your profile is pretty sparse, saying you're a consultant, you've made several posts as to CFDs, so are you trying to buy or sell or what might the interest be in this method?

What's the goal?

BTW, are you familiar with predatory dealing and lending in RE? Texas has municipal ordinances/laws concerning such in addition to the state, dealing in Dallas, Houston, Austin and San Antonio, need to check specifically on their views. :) 

Originally posted by @Bill Gulley :

@Carrie Cathey 

Curious, your profile is pretty sparse, saying you're a consultant, you've made several posts as to CFDs, so are you trying to buy or sell or what might the interest be in this method?

What's the goal?

BTW, are you familiar with predatory dealing and lending in RE? Texas has municipal ordinances/laws concerning such in addition to the state, dealing in Dallas, Houston, Austin and San Antonio, need to check specifically on their views. :) 

 Awesome! Thanks again!

I am a consultant/area coordinator for our investors. They are interested in CFDs and I want to know as much as I can from experts on BP so I can to direct these investors to the right market and offer the best advice.

I purchased a property under CFD a couple of years ago (before I was an agent). Then in the process of getting my RE license I learned the seller had violated multiple sections of the Texas Property Code and Deceptive Trade Practices Act in my transaction - and he is a broker! I hired an attorney, who was able to get the contract dissolved in a settlement. I would definitely not recommend CFD unless you fully understand all the legal requirements.

Originally posted by @Bill G.:

Carrie, Texas has such restrictive requirements for installment sales (CFDs) that they aren't done, ...

You can find more about CFDs by searching here on BP, to posts made in the past year.

Good luck :) 

There is a point of view that most of the CFD restrictions do not apply to investor purchases but only to owner-occupied properties. So you MAY be able to use them, even in Texas, to purchase an investment property or to sell a property to another investor (non-owner occupied). Of course, this is not a legal opinion as that can only come from an attorney and you need to have a good one working with you on EVERY deal.

Roy, the non-consumer loan, or commercial nature MAY be seen differently, but the other issues, deeds executed, circumventing foreclosure, insurance loss complications are not eliminated by the nature of the type of lending.

CFDs are simply outdated by title and re-conveyance attitudes of a majority of state laws, the quit claim deed filing process was always a matter that could be challenged, forcing a judicial process instead of a non-judicial process allowed under security agreements. A non-judicial foreclosure is much harder to "stop" than claims of equity under an installment contract.

I had a mortgage servicing operation, we guaranteed installment contracts through a unique method of advancing payments to note holders. I cranked out installment contracts like a printing press, I loved them when done properly. I had to correct more CFDs that had been done by others (including attorneys and after notifying them of the issues, they agreed to modify their docs and some simply said "I won't be doing these anymore" than anyone here has probably ever done.

Predatory lending is more in the forefront now than any time in my years, CFDs lean far to the side of a seller, primarily due to forcing a buyer to abandon title without due process but there are often other issues, such as notices of late payments, late payment amounts, notices of demand, time to cure deficiencies that may be different than accepted practice today.  Ability to pay is a concern regardless of an installment contract is residential or commercial.

Insurance assignments can be changed after the deal is done, a seller can terminate an insurance assignment or co-insured arrangement, this can happen as attorneys are not on the same page, after the fact the note holder's attorney may suggest stop doing such insurance arrangements, those who require the buyer to obtain their own coverage, others go with an assignment of loss proceeds. Conflicting points of view and then you have enforcement issues.

Today, I doubt there is a CFD that a good attorney couldn't blast out of the water, tear it apart, that is if the buyer goes that route. As long as a contract has a legal purpose, doesn't violate law, is accepted practice, is agreeable and paid as agreed, there are no issues, but since most installments aren't paid as agreed, the risk of things blowing up are mush higher than a straight note and deed of trust or mortgage that a buyer qualifies for. I just suggest not going there from a risk standpoint when there is a much better alternative.

Enough......  :)       

Originally posted by @Bill Gulley :

Roy, the non-consumer loan, or commercial nature MAY be seen differently, but the other issues, deeds executed, circumventing foreclosure, insurance loss complications are not eliminated by the nature of the type of lending.

CFDs are simply outdated by title and re-conveyance attitudes of a majority of state laws, the quit claim deed filing process was always a matter that could be challenged, forcing a judicial process instead of a non-judicial process allowed under security agreements. A non-judicial foreclosure is much harder to "stop" than claims of equity under an installment contract.

I had a mortgage servicing operation, we guaranteed installment contracts through a unique method of advancing payments to note holders. I cranked out installment contracts like a printing press, I loved them when done properly. I had to correct more CFDs that had been done by others (including attorneys and after notifying them of the issues, they agreed to modify their docs and some simply said "I won't be doing these anymore" than anyone here has probably ever done.

Predatory lending is more in the forefront now than any time in my years, CFDs lean far to the side of a seller, primarily due to forcing a buyer to abandon title without due process but there are often other issues, such as notices of late payments, late payment amounts, notices of demand, time to cure deficiencies that may be different than accepted practice today.  Ability to pay is a concern regardless of an installment contract is residential or commercial.

Insurance assignments can be changed after the deal is done, a seller can terminate an insurance assignment or co-insured arrangement, this can happen as attorneys are not on the same page, after the fact the note holder's attorney may suggest stop doing such insurance arrangements, those who require the buyer to obtain their own coverage, others go with an assignment of loss proceeds. Conflicting points of view and then you have enforcement issues.

Today, I doubt there is a CFD that a good attorney couldn't blast out of the water, tear it apart, that is if the buyer goes that route. As long as a contract has a legal purpose, doesn't violate law, is accepted practice, is agreeable and paid as agreed, there are no issues, but since most installments aren't paid as agreed, the risk of things blowing up are mush higher than a straight note and deed of trust or mortgage that a buyer qualifies for. I just suggest not going there from a risk standpoint when there is a much better alternative.

Enough......  :)       

 Thanks for your advice Bill.

@Bill G. 

All very good points! 

Another great discussion that should serve as a reminder there are few (none, even) simple answers in this endeavor.  That's part of what makes it so exciting and definitely what creates the potential for profit.

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